Friday, 23 February 2007

The "Virtual Economy" - not for real?

I was looking at an article recently in The Register bemoaning the fact that the statistics on SL were being over-hyped by Linden Labs, and that the "virtual economy" was actually a small niche market. The article was effectively poo pooing SL as a marketing medium, concluding that

"this economy has a population about the size of Ilkeston, Derbyshire, or Troutdale, Oregon. And each business has the prospect of a market of no more than 100 people in one place - a number easily accommodated by a church hall"

The article's maths were based on the number of concurrent users, and the incidence of people actually doing trade in SL (premium accounts, buying $L etc.)

This raises an issue about the validity of the SL "Virtual Economy" as a force to be reconed with. When you look at the numbers (as in The Register) you find that there aren't actually a huge number of people dealing in $L. In fact, $L dealing is all about land, the craft industries of making artefacts or scripts, sex and gambling. OK, there have been attemtps to move into modelling RL financial institutions with things like the "World Stock Exchange", but this has proven to be a pretty amateurish undertaking which has exposed great holes in the financial governance of SL.

This got me thinking about the "paying" residents, and the state of the "virtual economy". I believe that the “virtual econonmy” really refers to the “hobbyist” SL users (who are also the same ones who were made up by LL’s suggestion that freeloaders should be blocked at times of high traffic).

Meanwhile the “commercial” or “educational” users of SL are more likely to be the ones outside of the “SL Virtual Economy” (i.e. not actually “trading”, but will be renting land or islands from LL). I think the argument goes that “commercial” users of SL (i.e. the IBMs and BMW’s of this world) will be happy to pay LL for the privilege of using their servers (i.e. rent for a private island) but won’t want to get involved in dodgy dealing of $L (as demonstrated by the the World Stock Exchange in SL) particularly as there are no controls or policing of transactions.

This extends further into how businesses permit employees to use SL... again, would you like to sign off my expenses if I were to put in for e.g. “£50 to cover purchase of $L” when I then can’t show how the $L were spent (is a really good hairstyle for my avatar a good use of business expenses????... or can you prove that I’ve not been purchasing dodgy animations from virtual Stringfellows??!)

Sunday, 18 February 2007

SL feeling the strain?

I've just come across a rather worrying post in the 3pointD blog which tells how Linden Labs may start restricting access to SecondLife when the servers are feeling the strain of too many users (e.g. at busy weekends). Apparently SL is just getting too popular! The official Linden announcemnet can be found here.

Being money orientated (c'mon, you didn't think Linden created SL just for fun did you??) the criterion for who gets locked out is based on whether or not your account is verified, and have you purchased anything from Linden (e.g. Linden Dollars, Land etc.)

So for a Yorkshireman like me (for the un-initiated, a Yorkshireman is described as "a Scotsman stripped of his generosity") who has done all his ambling in Second Life on the cheap (i.e. for nothing) then the chances are that I soon won't be wandering around SL at weekends!

Then again, we've already had pointers from Linden Labs that they are looking at opening up the servers so that others can host their own bits of SL.... but the indications were that this would not be happening for a while.

The question then arises as to how much this will affect the viablity of SL as a marketing medium - after all, the selling point for SL to advertisers is that there is an audience of about 3Million users... but if access is restricted, this becomes less attractive. Then again, if we follow the IBM approach to SL - i.e. that it is just a proving ground for 3D Metaverse activity, then are the restrictions a problem???? Perhaps.... after all, would you want to invest your R&D activities in a service which could run out of capacity?

** Footnote:
I've just been to the Linden blog to read the original announcement. There are about 380 responses from SL residents.... on a quick straw poll, the majority seem to be in favour of the move.

Not surprising really - if you have a financial investment in SL you will want to keep the environment running smoothly - preferably at the expense of freeloaders. But this also highlights a change in demographic over recent months; in which the influx of users has led to a significant number of unverified accounts compared with premium accounts.

I guess I'll just have to go and buy a few $L to keep my account active!

Wednesday, 14 February 2007

Advertising like the olden days

I've just been reading an article in the Huffington Post about advertising and Second Life. I get the impression that Huffington readers aren't really into SL. The author of the article can't quite believe that advertisers are taking Second Life seriously as a platform.

But the article then went on to highlight a quote from Philip Rosedale, the CEO of Linden Labs on the topic of advertising....

Second Life is different than the real world because of the marginal cost of making [advertising] bigger. If you buy billboard space (in the real world), there's an ability to impose online advertising on people that is pretty leveraged. That amount of leverage does not exist in Second Life because people are in control of their own attention. You don't have to sit and listen to beer ads. On the flip side is that what many advertisers are doing in Second Life are way more interesting than what they're doing in reality. They'll consume happily because of the sheer novelty.

Huffington's take on this is that SL is a good place to buy advertising because the residents of SL are more receptive because they are given a choice of whether or not to view the ad.

Actually, it demonstrates why Advertisers in SL have to be more creative than they are currently in RL. Putting your message in front of consumers has become too easy with modern media - it is simple to create popup adverts on web pages, or put commercials in the middle of TV programmes. In SL, the user is able to choose whether or not to go and view an advertiser's site.... a bit like in the olden days when the only medium available to an advertiser was a poster or billboard.

Think back a hundred years or less, and shopkeepers had to make their stores attractive enough to draw in the customer (note: Customer and not "consumer"), and then offer a level of service that would retain their attention. Now compare this with the modern world where "consumers" have "messages" rammed down their throats at every turn.

So, paradoxically, the latest modern media (3d Metaverses) are taking us back to the good old days when adverts had to be novel and creative, and shopkeepers had to offer good service!

Wednesday, 7 February 2007

Fashion for furries

A very short entry, once again thinking around the topic of Avatars.

I've already said how odd it is to have a conversation with a giant rabbit, or a wolf in a suit.... and mused on the motivation behind users selecting particular styles of avtar. Chosing the "right" avatar (getting the appearance, sex, size, species! right) can take ages ( as I discovered!). Of course, there is the myriad of clothes shops producing clothes, hair, even complete avatars to suit all needs.

Appearing in SL as a "Furry" however, can have it's problems (apart from not being taken seriously) as I discovered when reading about the recent SL Fashion Week event in SLNN.COM: A Fashionable Night Out

Photo courtesy of SLNN.COM.

What amused me was the paragraph...
"caLLie cLine..... said she spends about 7 hours a week designing new clothes for her line. When asked about how to manage tails with prim skirts, cLine indicated she would be doing some clothes for furries in the future."

The concept of having to design clothes specifically to accommodate tails on furries seems bizarre... but, I suppose, is a real problem if you have a tail.... it's just that we don't normally HAVE tails in RL..... so yet another concept to get our brains around in SL!

Friday, 2 February 2007

Stocks and shares

I have been calling into the World Stock Exchange (WSE) in SL recently... I'd been there earlier in the week to find out a bit about SL share dealing. The exchange was due to start trading a couple of days ago, but when I got there it was still closed... all marble halls, a few posters on the wall, and a message floating in the air to say the exchange would be closed until 1st Feb.

When I got there today, the exchange was STILL closed, but this time there were a few SL inhabitants (some in suits) coming to look at the exchange. Apparently something has gone wrong with the scripts, and the coders are all in bed getting some sleep (must have been a late night!)

This to me is something of a schoolboy error. It looks like the scripts for the exchnage have not been properly tested..... it can't have taken too much effort to set up a dummy exchange in a nice quiet spot and get some friends over to make test transactions. I think it goes to show that an IT professional is needed to do the implementation - someone who knows about test and release strategies!

The problem is that trading stocks and shares is all about trust - I trust the dealer to use my money to buy the shares I asked for. I trust the compnaies offering shares to be above board and honest. But when the company taking my money can't get their computer system running properly, then I wonder if I can trust them.

There was also a lot of speculation over the value of the current tranche of IPOs in SL. A number of the traders had the view that a few too many shares were being offered. My naive view is that they'd have been better offering just a few shares, and letting the first investors earn a packet. THEN go for volume once the market has been kick-started.

I think it will be interesting to see if the exchange does actually kick off & do some trading in the next few days.... or will it disappear into oblivion? There is, of course, the chance that an RL bankiing entrant into Sl will come along and snap up the SL exchange! Then again, with teething troubles fixed, it could be that the exchange goes live and makes a killing!